Abstract
This study examines the roles and ideologies of cross-boundary statecraft in the context of urban entrepreneurialism in multi-level bureaucratic China. Referring to comparative studies on city diplomacy, intrapreneurialism, and state entrepreneurialism, we conducted a case study of Quzhou Inno-Industrial Park (QIIP) (an enclave industrial park) in Zhejiang province to clarify the nature of territorial rationality in cross-boundary development. We thus found that entrepreneurial objectives were fulfilled through top-down politics, wherein roles played by the central, provincial, and municipal governments were differentiated in territorial expressions. First, the provincial government actualized central government initiatives by promulgating developmental agenda and distributing to municipalities under state entrepreneurialism. Second, municipalities forged independent territorial rationality to benefit bilateral development through city diplomacy when releasing cross-boundary cooperation schemes. Third, multiple governments have chosen speculative and experimental practices over passive compliance with allegiances through top-down bureaucratic dictates, thus fulfilling provincial developmental intentions within territorial incentives of local benefits. Overall, these findings reveal an arrangement that greatly differs from a fixed modality of urban entrepreneurialism, wherein cross-boundary statecraft exposes stepwise genres in a transitional spectrum of urban entrepreneurialism that reflects perceptions of multi-level bureaucratic China.
Keywords
Introduction
Since the late 1980s, many studies have adopted the seminal thesis known as “urban entrepreneurialism” (Harvey, 1989) to investigate the roles, features, and strategies of city governments in their quest to elevate economic growth in various state contexts (Cox, 2010; Jonas et al., 2013; Theodore et al., 2011; Wu, 2016). Initially, urban entrepreneurialism was an emerging ideology derived from urban managerialism, as embedded in the neoliberal practices of nation-states, specifically denoting “a public-private partnership focusing on investment and economic development with the speculative construction of place [. . .] as its immediate [. . .] political and economic goal” (Harvey, 1989: 8). More recently, alternatives have emerged to foreground coordinated configurations among the governmental apparatuses, including city diplomacy (Acuto, 2013), state entrepreneurialism (Wu, 2017b), and intrapreneurialism (Miao and Phelps, 2019; Ramutsindela, 2019). The literature highlights a shared sense among all such alternatives, wherein entrepreneurial ideology exposes strong incentives of local accumulation within a given state-set territory and its corresponding jurisdiction (Agnew, 1994). At the same time, speculative strategies are legitimized by state sovereignty (Agnew, 2010) and gestures toward practical toolkits for municipal statecraft (Lauermann, 2018). From an urban entrepreneurial lexicon, motivation that drives local growth has been legitimated and strategized through consistency between territorial boundaries and administrative jurisdiction. As an outcome, the entrepreneurial manners of governmental apparatuses relieve tensions on multiple bureaucracies and address territorial rationality underpinning coalitional partnerships through cross-scale and cross-boundary cooperation (Agnew, 2015; Van Houtum, 2005).
Discourses on regional entrepreneurial governance have articulated possible territorial statecraft in diversified institutional contexts. Phelps and Miao (2019) categorized statecraft that acquires resources from states, markets, and other external fields as city diplomacy, but deemed efforts aimed at municipal internal experiments as intrapreneurialism. Wu (2020) proposed an engagement of state entrepreneurialism in China, which exercises the polity of state through a planning-centric paradigm. Market sectors in state entrepreneurialism are invoked as de facto instruments captured by the state apparatus. Although many discourses have articulated the geopolitical formation of regional governance processes, some have criticized that neither city diplomacy, intrapreneurialism, nor state entrepreneurialism can describe the contour of urban entrepreneurialism due to the neglect of territorial politics alongside the scales and boundaries (He, 2020; Newman, 2010). Thus, the way in which government bodies align with nested territories and imbricated bureaucracies is critical in the formulation of developmental statecraft that solicits support through various vertical and horizontal approaches (Xu and Yeh, 2009, 2013). Writings focused on territorial expressions have clarified the consistency of organizational legitimacy, bureaucracy, and territory, whereby scales and boundaries distinguish benefits between internalities and externalities (Brenner and Elden, 2009: 354). Nonetheless, there is scope for further reflection. Despite growing interest in cross-scale urban entrepreneurialism in territorial statecraft (Chung and Xu, 2021; MacKinnon, 2011; Shin, 2014), there is still insufficient evidence on territorial statecraft in the field of cross-boundary development.
As such, this study investigated territorial statecraft in the context of cross-boundary development across municipal governments. Far from a fixed modality of urban entrepreneurialism, we argue that territorial statecraft is orchestrated after the stepwise transition of spatial dictates, agency maneuvers, and ideological transitions in the spectrum of urban entrepreneurialism. We conducted a case study of an enclave industrial park in Zhejiang province to elucidate the diverse ideoscapes of entrepreneurial governments in marketized China. Moreover, we examined the adaptability of different modalities of urban entrepreneurialism embedded uniquely into China’s cross-boundary politics, wherein the entrepreneurial features of provincial-municipal relations have rarely been scrutinized when compared to those of central-local relations. We found that a condensed expression of provincial and municipal governments as “local” actually problematizes measurements of hierarchical territorial rationality. To highlight different entrepreneurial ideologies, we therefore revisited a discursive articulation of multiple government levels (i.e., provincial, municipal, and agency).
As a landscape of human geography, the enclave is enrolled as a developmental toolkit to promote alien investments from developed to less-developed areas (He, 2013; Iossifova, 2015; Sidaway, 2007). Enclave development uncovers a rising vision of experimental governance via cross-boundary cooperation and territorial jurisdiction coordination between local governments. Thus, an enclave industrial park is conducive to addressing entanglements of space and politics upon multiple governments, which are modified with and impelled by a developmental rhetoric based on territorial rationality. In this empirical study, we focused on Quzhou Inno-Industrial Park (QIIP) in Zhejiang province, where the Zhejiang provincial and Quzhou municipal governments play relatively different roles in enclaving statecraft. We found that the provincial government not only distributed the central government’s developmental agenda to municipalities through top-down politics, but also fostered an institutional platform for market-oriented vehicles to experiment with the redistribution schemes used for territorial resources. Meanwhile, the municipal government formulated speculative and experimental practices to maximize local benefits based upon territorial rationality. These observations may inject a fresh argument that yields a full-fledged conceptualization of urban entrepreneurialism in post-reform China.
The remainder of this article is organized as follows. The next section revisits the roles, values, and gestures of urban entrepreneurialism in various political and societal conditions. The next section discusses our data collection procedures and study methodologies. The following section clarifies the developmental pathway of QIIP, thus demonstrating a stepwise transition of ideologies among hierarchical government apparatuses. Finally, we elaborate on our main findings and discuss theoretical implications.
Territorial urban entrepreneurialism: A critical review
Entrepreneurial roles in territorial statecraft
Since the late 1980s, alternatives of urban entrepreneurialism have emerged against the backdrop of different state contexts (He, 2020; Jonas, 2020b; Lauermann, 2018; Phelps and Miao, 2019). The very start-up perception of “procur(ing) benefits for populations within a particular jurisdiction” (Harvey, 1989: 8–10) was bound with state-administrated territories. Meanwhile, urban entrepreneurial strategies were primarily materialized by the division of labor, consumption space, monopolistic status in finance, information, infrastructure, and surplus distributions (Harvey, 1989: 8–10). Urban entrepreneurialism has since been reshaped by a series of critical discourses on the definition of territory, thus identifying a bounded space within a specific jurisdictional power, further trapped by localized economic rationality (Agnew, 2010, 2015; Painter, 2010). Amid consistency between a range of local benefits and jurisdictional boundaries, territorial rationality is positioned within the horizontal politics of interjurisdictional efforts. Likewise, state power serves as an “institutional site, medium and outcome for the production of territory” (Brenner and Elden, 2009: 364). Based on state power and state territory, urban entrepreneurialism articulates the speculative state role in pursuing spatial accumulation within typical sectors, quasi-public agencies, and market-oriented trading, thus invoking spatial production through local cooperation and competition (Jonas, 2020a; Zhang et al., 2022b).
Various disputes have arisen under the wide array of perceptions concerning territorial rationality in multi-level governments. Likewise, a nested hierarchy of local jurisdiction has given rise to bargaining and resistance in scalar politics (Sweeney, 2013; Xu and Yeh, 2013). In the United Kingdom and continental Europe, urban entrepreneurialism was initially configured by hollowing out central governments, decentralizing municipal states, and hook decoupling upon fiscal and political connections (Mookherjee, 2015; Peck and Tickell, 2017; Ward and Swyngedouw, 2018). The municipal government was objectified as a major activist in speculative or experimental local statecraft (Lauermann, 2018), and thus to consolidate a “grounded city” (Engelen et al., 2017). Municipal governments are prone to accelerating local-asset growth through an assemblage of spatial strategies and market-oriented approaches in an experimental or speculative fashion (Thompson et al., 2020).
Neoliberal theorists have presented a pair of opposing actors in alternatives of urban entrepreneurialism; namely, the municipality and state. The municipality articulates an internal municipal spatial strategy by escaping from allegiance to the central government (Acuto et al., 2017; Miao and Phelps, 2019), whereas the state actualizes municipal entrepreneurialism in a top-down manner (Wu, 2020; Zhang et al., 2019). Modalities of state entrepreneurialism and city diplomacy set a pair of entities that represent different territorial rationality. Specifically, in rationality dominated by municipalities, cross-territory cooperation is likely to obtain localized benefits, thus revealing diplomacy relations among local governments. The counterpart suggests that the central government has manipulated spatial strategies to distribute resources in consideration of regional coordinated development (Cox, 2022; Lim, 2014).
Alternatives of ex-territorial urban entrepreneurialism
Their disputes aside, scholars have provided alternatives to territorial expression in urban entrepreneurialism. In the early neoliberal lexicon, the aims of territorial statecraft are actualized via the prosperous local economy through the secondary circuit of capital, wherein the accumulated surplus was fixed in localized space (Harvey, 1985). The notion of territory helps to distinguish different legitimate ownerships of localized benefits by setting physical boundaries (Agnew, 2013; Brenner and Elden, 2009). On one hand, cross-boundary development demonstrates an alternative in which entrepreneurial development is detached from statecraft inside the boundary. On the other hand, it is more targeted at windfalls from speculation that escapes the territory trap. City diplomacy is a modality that expresses the interjurisdictional value of municipal governments (Acuto et al., 2017). Service providers have gained identity through city diplomacy that occurs via market toolkits, inter-aliasing, city promotion, marketing, and branding (Anholt, 2016). Legitimate administrative intervention from the municipal government is sensitive to the limited range of jurisdiction, as statecraft is generally behind relevant market forces (Wu, 2017a).
Intrapreneurialism denotes an ideology pertaining to “processes of innovation and indeed invention within the still sizeable public organizations that are the central and local arms of governments” (Phelps and Miao, 2019: 313). Compared with city diplomacy that articulates development through an external city environment, intrapreneurialism is focused on service upgrades through internal renovation. Wu (2020) offered an exceptional circumstance for intrapreneurialism, including a different modality in a tailored description of the Chinese context. The party-state conceives nationwide territory as a whole, and formulates developmental agenda in a top-down fashion. The notion of state entrepreneurialism clarifies how the central government successfully participates in regional development through a top-down bureaucratic system (Wu and Phelps, 2011). It articulates the long-established paradigm of state centrality and market instruments in China (Wu, 2017a). Thus, the central government has formulated integration-oriented policies to enable regional coordinated development in diverse conditions.
Nonetheless, these alternatives do not illuminate the nature of statecraft in inter-jurisdiction efforts. In terms of structural factors that characterize urban entrepreneurialism, distributional politics across different levels of governments are inarguably central to contemporary urban governance (Jonas, 2020b). Differences in distributional politics exist because the central government has orchestrated jurisdictions and boundaries for subnational regions. Currently, multiple governments work toward entrepreneurial strategies, but are guided by different entrepreneurial ideologies. Thus, urban entrepreneurialism is inherently hybrid (Brenner, 2009; Horak, 2013).
Entrepreneurial territorial statecraft in China
The modality of urban entrepreneurialism varies according to the state context, thus revealing salient features with unique state characteristics under sociocultural conditions, especially in East Asia. For example, this includes the property states in Singapore and Hong Kong (Haila, 2015), developmental state in Singapore (Liow, 2012; Wong, 2004), and party-state in China (Cartier, 2015). However, very few studies have investigated territorial expression through cross-boundary developments in urban entrepreneurialism. Meanwhile, the structural combination of territories and bureaucracies embodies diverse forms in city-regional growth (Luo and Shen, 2009; Zhang et al., 2018, 2021). Findings from different city-regions in China show that various sub-models drive cross-boundary development, including the politics of distribution (Jiang and Zhang, 2020; Wang, 2019), planning centrality (Wu, 2017a), and outcome-oriented intrapreneurialism (Miao and Phelps, 2019).
In marketized socialist China, the central government is the overarching bureaucracy in municipal development through top-down toolkits (Wu, 2017b). Thus, marketization is viewed as a state-controlled instrument of economic growth (Wu, 2017a). The production of state innovation through bureaucratic endeavors positions legitimate state intervention as a co-producer of bureaucracies and market bodies (Jonas, 2020a, 2020b). The co-producer role materializes through outsourcing, compulsory competitive tendering, and new public reforms, wherein the market force is a vehicle for upgraded government services, public goods, and administrative efficiency (Phelps and Miao, 2019).
In China, urban entrepreneurialism is a Janus-faced landscape comprised of different entrepreneurial ideologies in city-regions (Jonas, 2020a; Wu, 2017a; Zhang et al., 2018). The simplified division of central and local governments has failed to clarify the outcome of “reactionary politics” (Lauermann, 2018) when different municipalities bargain for coalitional benefits. Multiple governments have worked to fulfill state goals (e.g., accelerators, executors, and institutional providers) (Xu and Yeh, 2013; Zhang et al., 2019). The hierarchical politics of multiple governments is an important aspect of China’s state governance that is exemplified by central-local relations (Cash et al., 2006; Chung and Xu, 2021; Xu and Yeh, 2013). However, in urban entrepreneurialism 2.0, the division of central-local relations has downplayed provincial government roles. The current literature frames provincial governments as “vital cogs” that mediate tensions and struggles in central-local relations (Zhang et al., 2022a). These governments mobilize intercity cooperation by forging institutional platforms, thereby facilitating a reshaping of territorial rationality in municipal governments.
Generally, urban entrepreneurialism has “exceeded beyond the territory trap of cities and nations” (Phelps and Miao, 2019). Nonetheless, few scholars have investigated how territorial rationality affects bureaucratic attitudes toward cross-boundary development under urban entrepreneurialism. Given that territorial expression is classified into degrees, three steps of cross-boundary cooperation have existed over its developmental course; namely, social collaboration, economic investment, and the spatial enclave/exclave. Among these expressions, territorial exchanges between jurisdictional powers are conspicuous in the rationality of multiple governments.
The enclave park approach has remained an important spatial strategy since the era of Maoism, wherein agglomerations and enclaves were politically formed through different geopolitical settings (Phelps et al., 2020). Enclave establishment has been characterized by distinguished mosaics that differ from the divisions of administrative zones, either overlapping or fragmenting according to polycentric economic status. In contrast to an administrative level that is bounded by territorial frontiers, enclaves prevail at entrepreneurial local statecraft in their function as special economic zones, thus invoking regional development through adjusted boundaries and jurisdictions (Phelps et al., 2020). Spatial dictates out of coherent expansion foreground an intervention approach to establish a regional linkage of flows and global pipelines for backward areas; meanwhile, developed zones may acquire comparative advantages in consumption prices, labor forces, and land rent gaps from leaping out of megapolises.
Research methodology
This case study explored the nature of enclaving statecraft in Zhejiang province, with the aim of both distinguishing the different roles of multiple governments in cross-boundary development and uncovering the stepwise transition in which urban entrepreneurialism moves from state entrepreneurialism to intrapreneurialism. Enclaving statecraft elucidates the dynamics of territorial rationality, insofar as it involves territorial adjustments across enclave governments, exclave governments, and emerging government agencies in enclaves. We addressed three principal questions. First, what modalities of urban entrepreneurialism have multiple governments undertaken in the context of interjurisdictional efforts? Second, how do these multiple governments modify territorial rationality through cross-boundary statecraft? Third, what characteristics emerge throughout the transition of entrepreneurial ideologies in different stages of cross-boundary development?
The next section contextually analyzes transitions in the leading roles of provincial and municipal governments that have enabled QIIP to function at the city-regional scale, as needed to achieve regional coordination. During our field study from 2021 to 2022, we conducted four in-depth interviews with officials from the QIIP committee, thus availing ourselves of their knowledge and experience. Specifically, the interviewees included three leading officials and five employees who were in charge of park administration, enterprise introduction, and market supervision. Moreover, we assessed local development agendas, open-access publicity, and related documents across multi-level governments.
Enclave industrial park in Zhejiang province: Urban entrepreneurialism beyond territorial governance
Top-down initiatives in land quota trading via the Zhejiang provincial government
Zhejiang is one of the most developed provinces in China. In 2021, it ranked eighth among the nation’s 31 provincial administrative regions (apart from Hong Kong, Macau, and Taiwan), with a GDP of 7,350 billion CNY. However, it also exhibits dramatically uneven development between coastal and mountain cities in terms of economic growth. Returning to numbers from 2021, Hangzhou city accounted for 24.6% of Zhejiang province’s GDP, contributing 1,810 billion CNY. By contrast, the mountain city of Quzhou produced a GDP of 187.6 billion CNY, reaching only 10.4% of Hangzhou’s. In fact, the Yuhang district of Hangzhou alone outpaced Quzhou, with a GDP of 250.2 billion CNY. This is mainly the result of polarized provincial government investments and the agglomeration of industrial enterprises into larger cities and city-regions.
The Zhejiang provincial government aimed to reverse polarized spatial development through policy intervention. In 2002, Zhejiang province launched the strategy known as Mountainsides and Seasides Cooperation Initiatives (MSCIs) to forge regional cooperation between developed cities (i.e., in the coastal area) and backward cities (i.e., in the mountainous area), with the ultimate goal of industrial growth and social prosperity. In general, MSCIs open an instructive window into China’s market-oriented socialism, therein pursuing polarized economic growth while ensuring shared prosperity between cities with strong and weak economies (Table 1).
MSCI goals for backward cities.
Source: Implementation plan for leap-forward high-quality development of 26 counties in mountainous areas of Zhejiang province (2021–2025).
Essentially, MSCIs is an institutional framework for the commodified exchange of various developmental resources, including lands, investments, and high-tech elites. Since the 2000s, China’s central government has aimed to integrate the functions of economic growth and socioecological supervision, wherein the functional importance of ecosystem services and food security are encapsulated in the evaluation system for local cadre performance. Evaluations followed a top-down approach that originated in the provincial government, then shifted to municipal governments, and finally ended with grassroots government. Here, the upper-level government holds legitimate power to formulate regulatory schemes for lower-level governments in the spheres of ecosystem services and food security. In 2008, the central government formulated National Ecological Function Zoning, requiring provinces to set the least amounts of areas in ecological spaces as a bottom-line for development. Ecological spaces included forests, grasslands, and wetlands, which score differently based on ecosystem value. In 2013, the central government reasserted the strategic position of food security and designated the least amounts of areas of arable land for each province. With these two regulations, the central government distributed mandatory nationwide goals to municipal governments; then, provincial governments extended the strategic scheme to municipalities.
Subsequently, the Zhejiang provincial government devised scoring schemes to distribute land quotas to each city. Specifically, the land quotas of agricultural and ecological areas were linked with the scale of industrial areas; here, cities with more land quotas have the priority to expand industrial areas. In turn, this land regime creates a scarcity of industrial land quotas. While backward cities have obtained many land quotas, few companies are likely to invest in destitute areas. Thus, developed and backward cities adopt trading approaches to gain extra land quotas, which helps meet the demands of market agents. Under MSCIs, Zhejiang province has strategically fostered a trading platform for land quotas, wherein backward cities can sell their surplus land quotas to cities with additional demands.
The start-up form of trade was used to transfer payments (i.e., developed cities obtain land quotas through horizontal transfer payments between municipal governments). Nonetheless, this approach may further polarize spatial resources. In the land quota market, developed cities are more likely to attain monopolistic status through quota bidding. As such, supervising approaches other than the quota trading platform were expected in intercity cooperation. In response, the Zhejiang provincial government carried out city-pairing schemes (i.e., pairing developed and less-developed cities) to avoid market capture. Thus, Yuhang district in Hangzhou aligned with Quzhou city for industrial growth and regional coordination in 2012.
MSCIs advocated cooperation among local elites. In this arrangement, bilateral cooperation involved business elites and political leaders. Under the MSCIs framework, the leaders of developed and backward cities have mutual opportunities to transit positions. Through the promotion of local officials, investments and government grants were provided to backward cities in the position transit of city leaders. Since the 2000s, the city leader of Quzhou has worked to attract external investments. He negotiated with his predecessor, who had been promoted to a position in charge of industrial parks in Zhejiang. Through their negotiations, the Yuhang government provided a piece of industrial land to Quzhou, allowing it to develop as an enclave industrial park. In return, the Quzhou government would trade its surplus of land quotas to the Yuhang government. In 2012, these governments jointly commenced the construction of QIIP, which was completed in 2015 and became operational in 2016 (Figure 1).
Location of QIIP and MSCIs involved cities.
As shown, QIIP is located in central Yuhang, adjacent to Future Inno-Science City. Business elites quickly acknowledged the potential benefits. Meanwhile, the MSCIs strategy provided policy incentives through market tools, including tax cuts, public rental housing supplies, and low-interest loans. Given its satellite position around Hangzhou, a wide array of universities, research institutions, and private investors have agglomerated in Yuhang district, which is conducive to high-tech employees and upgraded enterprises. QIIP soon attracted a number of digital economic enterprises from Hangzhou, including Xidi ENV-Tech of Zhejiang Ltd and Haozhuoyou Medical-Digit Tech of Hangzhou Ltd.
Overall, top-down initiatives allowed through MSCIs highlight state entrepreneurialism within the Zhejiang provincial government. Territorial rationality aimed for a better distribution scheme within Zhejiang’s jurisdiction, specifically to ensure the implementation of state strategies in the fields of agricultural and ecological preservation. As a side effect, this territorial rationality restricted the potentials of developed cities, given that the scheme was formed through market instruments. The Zhejiang provincial government offered an adaptive toolkit that municipal governments could use for modification purposes, albeit with administrative restrictions. As the two governments enthusiastically traded land quotas, backward cities gained revenue while developed cities expanded their industrial areas. Here, intermunicipal cooperation was established through the provincial government. From 2002 to 2012, the Zhejiang provincial government played a leading role in forging the institutional context of MSCIs.
Municipalities play leading roles in promoting the enclave toolkit
In China, provincial governments can foster cross-boundary statecraft in two ways, including horizontal fiscal transfer payments and commodified land quota trading. As mentioned, QIIP was devised under a policy intervention enacted by the Zhejiang provincial government, which nevertheless provided an institutional framework for trading land quotas rather than stipulating a fixed form to bridge intercity cooperation. Meanwhile, municipal governments took market-oriented approaches to put traded land quotas into practical use. The Quzhou government expected that local enterprises could establish research and development (R&D) departments in QIIP, while manufacturing departments could be located in Quzhou; the Yuhang government could expand its industrial area by trading land quotas. At this stage, municipal governments took actions similar to city diplomacy under the policy framework developed by Zhejiang province. Municipal governments obtained redistributed land quotas through market instruments as a form of experimental or speculative statecraft in bureaucracy. During this period, they independently reached a cooperative agreement beyond vertical politics (i.e., from provincial governments to municipalities). The fiscal approach proceeded according to market instruments based on horizontal twin-city relations rather than any vertical distribution scheme arranged by the provincial government. At this time, the Zhejiang provincial government did not implement a practical toolkit, but still regulated cooperative progress through the MSCIs strategy.
The Quzhou and Yuhang governments were responsible for constructing QIIP. Ultimately, the park differed from other common forms of industrial enclaves, which are considered developed when compared to exclaves. QIIP exhibited the opposite, as the Quzhou government promoted cooperation with a more developed city and purchased developmental accessibility rights through its surplus of land quotas. Yuhang is near Future Inno-Science City, which is the most promising industrial cluster in Hangzhou; a number of high-tech enterprises are clustered in Yuhang, including Alibaba, ByteDance, OPPO, and VIVO. Moreover, numerous universities, research institutions, and R&D laboratories have locally agglomerated, including Zhejiang University, Zhijiang Lab, and Lakeside Lab. Thus, collaborations between R&D departments and industries were common in Yuhang. By contrast, the majority of Quzhou’s enterprises were in primary industry sectors. In 2012, the Quzhou government bargained with the Yuhang government to acquire a piece of land near Future Inno-Science City, prompting it to offer a piece of land that could accommodate QIIP in return. In this context, the Yuhang government was responsible for administrating civil affairs and providing public services, while the Quzhou government was responsible for economic development affairs. Through diplomacy from city leaders, QIIP was jointly fostered as an industrial enclave of the Quzhou government under the MSCIs strategy. Local officials described its establishment as follows: QIIP is located in the bustling district of Yuhang, adjacent to Future Inno-Science City. Phase I of QIIP started construction in 2012, completed in 2015, and started operation in 2016. The total area of QIIP in Phase I comprised 6.7 hectares, and the net ground area was about 4.3 hectares. There are about 60 enterprises settled in QIIP, and they are occupying 80 to 90% of offices ’til now. We [QIIP committee officials] struggled in the operation of QIIP because the province or city government did not offer any successful examples that an enclave industrial park was presented in a way from a backward area to developed area. We operate the QIIP through public-private cooperation, where the committee was responsible for introducing enterprises and market bodies provided affiliated services. (Interview with QIIP committee official A, 13/12/2021)
The Quzhou government has been openly enthusiastic about QIIP. Indeed, the park’s construction, financing, and operation were driven by its actions, as conducted via the Build-Operate-Transfer (BOT) mode. In 2012, the Quzhou government established Quzhou-QIIP Investment Management Ltd. (QIM Ltd.), which operates as a quasi-public agency with market-oriented features, thereby controlling the Quzhou State-Owned Assets Management Bureaucracy. QIM Ltd. registered in Yuhang with a start-up investment of 283.82 million CNY, eventually purchasing land from the Yuhang government through a marketized approach involving legitimate bidding. QIIP has remained operative since 2016. Over this time, QIM Ltd. has functioned as a property management enterprise that provides commodified services for QIIP, including business registrations, loan applications, and tax declarations. In addition, QIM Ltd. is responsible for security, catering, and other facility provisions (Figure 2).
Hierarchical relations of governments and statecraft.
Territorial statecraft was reflected in the market-oriented and bureaucratic field. A quasi-public agency known as the QIIP committee, consisting of officials from both the Quzhou and Yuhang governments, was established to administrate the QIIP program. The committee took a local government role with local jurisdiction, in which it independently formulated urban planning, industrial policy, and the taxation system. From 2016 to 2019, QIIP was jointly managed by two agencies, including QIM Ltd., a state-owned enterprise, and the QIIP committee, a quasi-governmental agency. In 2019, land property was transferred from QIM Ltd. to the QIIP committee. This is because QIM Ltd., which operated in the business sector, incurred a debt burden with no way to make profits. This arrangement revealed a division of identity between the two agencies, wherein the QIIP committee administrated the enclave park through a politic approach, while QIM Ltd. operated through market rules. QIM Ltd. became more speculative in pursuing profits and escaped the principle set by the QIIP committee; for example, it abused its power when selecting potential enterprises and promising tax cuts through market gimmicks. Consequently, QIM Ltd. was required to cease property management activities after 2019, when the QIIP committee took over to regulate industrial policies through a bureaucratic approach.
As seen from 2012 to 2019, the leading role of territorial statecraft gradually changed. The Zhejiang provincial government formulated MSCIs, but did not participate in the BOT of QIIP. Both the Quzhou and Yuhang governments and QIIP committee drove the enclave industrial park forward. Quzhou’s enclave developmental agenda was formed after MSCIs from the Zhejiang provincial government. Thus, the modality of urban entrepreneurialism dramatically transitioned from a vertical distribution to horizontal negotiation. The MSCIs fostered an institutional platform of land quota trading and formulated a state entrepreneurial strategy from 2002 to 2012. The Quzhou and Yuhang governments then formed a diplomatic partnership through city diplomacy from 2012 to 2016. Finally, the QIIP committee and QIM Ltd. upgraded local services in QIIP through intrapreneurialism. The stepwise change in urban entrepreneurialism varied throughout the processes of planning, constructing, and operating the QIIP program (Table 2).
Policy formulation and its domains of QIIP in historic periods.
Source: Prepared by authors.
Various territorial rationality measures of municipal governments
An easily overlooked issue was estimating the entrepreneurial alternative of the Yuhang government in cross-boundary statecraft. As an entrepreneurial government that transferred jurisdiction to other government bodies, the Yuhang government seemed undermined in local benefits. From the perspective of state entrepreneurialism, Yuhang’s cessation could be perceived as a vertical intervention from the provincial government. Because the Zhejiang provincial government proposed MSCIs to reverse uneven development, Yuhang was appointed to assist industrial development in Quzhou. Therefore, the urban entrepreneurialism of the Yuhang government succeeded from the provincial government through a top-down initiative, with territorial rationality transcoded to reduce costs. From this perspective, only the provincial government’s territorial rationality existed, as it regarded Zhejiang province as a “bounded space distinguished by specific jurisdictional power” in the MSCIs. Municipal boundaries were conceived as internal administrative divisions of space. Another description was stepwise entrepreneurialism. From QIIP conception to operation, not only the provincial governments had territorial rationality, but also the municipal governments, which used enclaving and exclaving strategies in Quzhou and Yuhang, respectively. This view was also accepted by QIIP officials: Quzhou government has legit jurisdiction to administrate the QIIP park; by contrast, Yuhang does not much involve in the specific work of local investment and enterprise introduction. Yuhang is responsible for government coordination, such as the process from negotiating of land acquisition, annual tax settlement, and so on. Even so, Yuhang is very supportive of QIIP, as it obtained 10,000-mu (667 ha) of land quotas in negotiation with Quzhou. (Interview with QIIP committee officials B and C, 28/12/2021)
Since the provincial government implemented restrictions on the distribution of land quotas, industrial park expansion has already been a fait accompli for the Yuhang government. No alternatives exist to an adaptive approach via compromised negotiation. Several facts clarify this. First, the Zhejiang provincial government has not intervened in practical MSCIs outcomes since 2012. Although the provincial government tends to regulate the distribution of production space, it did not interfere through administrative approaches. Second, the Quzhou and Yuhang governments mainly cooperated through horizontal negotiations, without any assistance from provincial bureaucracies. The Quzhou government utilized the MSCIs strategy to pursue collaboration with Yuhang as an enclave development agenda. Third, the Yuhang government sought market-oriented trading for developmental resources through the QIIP program rather than a charity. Therefore, we argue that territorial rationality is a premise of statecraft used by the Zhejiang, Quzhou, and Yuhang governments. This has shaped various ideoscapes and influenced the adaptation of toolkits, as revealed during different stages.
To clarify the territorial rationality of the Quzhou and Yuhang governments, we investigated how the coalitional benefit was distributed. The outcome of QIIP mainly includes the five aspects of land, industrial land quotas, land rent, infrastructure investments, and property management costs. Meanwhile, its income includes land rents, tax revenues, and daily consumption among QIIP employees. The Quzhou municipal government paid for the industrial land quotas, land rents, infrastructure investments, and property management costs through QIM Ltd. By contrast, Yuhang only contributed one piece of land and a small number of administrative management costs.
For the Yuhang government, supporting QIIP appears to be a zero-sum game. If Quzhou refuses to trade land quotas with Yuhang, then Yuhang becomes restricted in its expansion of industrial areas. Faced with this circumstance, the Quzhou and Yuhang governments bargained to distribute the coalitional benefit. Judging from the results, both governments achieved their goals. In representation of the Quzhou government, QIM Ltd. paid commodified land rents to the Yuhang government. In return, the price was reduced to a reasonable amount, such that the rent gap was transferred back to Quzhou through the horizontal transfer payment. From the other side, the Yuhang government purchased 667 hectares of arable land quotas from the Quzhou government. These could not only be used to construct QIIP, but also provided extra development rights to expand Future Inno-Science City. On one hand, the Quzhou government efficiently utilized its land quotas in a better location through an experimental toolkit of cross-boundary development. On the other hand, the Yuhang government obtained speculative value through quota trading, as local industrial space would accumulate more benefits than if held in Quzhou.
Since revenue from QIIP was annually transferred to the Quzhou government, its public budget revenues continued to rise stably, even when the COVID-19 outbreak heavily impacted Yuhang’s economy. Overall, enclaving statecraft seemed to produce positive outcomes in Quzhou (Figure 3). The two governments invested a total of 1.527 billion CNY to construct and operate the enclave park. By October 2021, QIIP had agglomerated 61 high-tech enterprises. The fiscal incomes from QIIP were comprised of tax revenues from corporations registered in Quzhou and Yuhang, accounting for roughly 30% and 70%, respectively. The tax revenues of corporations registered in Quzhou were owned by the Quzhou government, while those from Yuhang were fully returned to Quzhou on an annual basis. In this context, the Yuhang government focused more on land quotas than taxes. To explain, the consumption habits of QIIP employees held greater potential for Yuhang, given that QIIP attracted many business elites from leading enterprises in Quzhou. Yuhang hoped that these individuals would both purchase local real estate and consume locally, which was seen as a spillover effect from QIIP.
Government income and GDP growth of Quzhou and Yuhang.
Transitional goals of territorial expression in QIIP
The context outlined in the above three sections can broadly answer our first research question, pertaining to how territorial rationality in multi-level government is expressed in different stages. Moreover, the modality of urban entrepreneurialism constitutes a stepwise landscape at each development stage. From 2002 to 2012, the alternatives of urban entrepreneurialism were characterized by state entrepreneurialism, through which the Zhejiang provincial government implemented state spatial strategies aimed at preserving arable land and ecological areas. From 2012 to 2016, urban entrepreneurialism was reconfigured by city diplomacy, wherein the Zhejiang provincial government did not intervene in any practical way through the QIIP program. Territorial statecraft was conducted under diplomatic negotiations between the Quzhou and Yuhang governments. From 2016 to 2019, the QIIP committee conducted entrepreneurial statecraft, which showed features of intrapreneurialism via government service upgrades and the modification of government toolkits and market instruments (Figure 4).
Stepwise transition of territorial rationality and urban entrepreneurialism modalities.
After 2018, developments in the QIIP program revealed whether the modality of urban entrepreneurialism was fixed or continuously transitional. In 2018, the QIIP committee found that the current land stock was approaching saturation, which prompted the QIIP committee to negotiate with the Yuhang government to expand the enclave industrial park. This indicates that the QIIP committee was characterized by an entrepreneurial identity, and no longer functioned as an agency that exercised jurisdiction on behalf of the bilateral government. In this regard, the QIIP committee became a territorial rationality holder that conceived its developmental territorial statecraft. At the same time, QIIP Phase II construction began; compared with QIIP Phase I, this effectively doubled the size of the park upon completion in October 2021.
In Phase II, the industrial enterprises changed. The Quzhou government initially took the form of this territorial statecraft to invite the headquarters of high-tech enterprises. Subsequently, manufacturing departments would be invited to Quzhou. However, QIIP took the initiative to develop the headquarters economy in enclave-developed regions, and invited these enterprises to establish factories in less-developed Quzhou. This distinguished QIIP from all other enclave industrial parks in China. By contrast, other parks were headquartered or placed R&D departments in developed areas, while manufacturing departments were placed in less-developed areas to cut costs.
This exhibited an experimental type of cross-boundary statecraft, since no attempt was experimented by this mode in risks. It met obstacles of unreasonable industrial structure in QIIP Phase I. QIIP was located near Future Inno-Science City, where most enterprises were positioned in the digital economy industry. These enterprises gained business profits with limited numbers of employees and R&D-led production procedures. While the Quzhou government was successful at the stage of taxation revenue, in the larger sense, it failed to bring factories back to Quzhou. Digital economic enterprises were categorically light-asset companies without manufacturing processes. This was a failure of experimental cross-boundary statecraft, as QIIP only returned territorial profits, but not for spatial accumulation from cross-boundary development.
In the operation of Phase II, the QIIP committee shifted from promoting digital economic enterprises to those with both R&D and manufacturing departments (e.g., semiconductor and pharmaceutical companies). There were several reasons for this. First, land rents were much higher in QIIP than in Quzhou. All land in QIIP was used for offices and laboratories, with no extra space planned for factories. Second, the QIIP committee formulated a tax policy that was biased toward high-tech companies. By contrast, Quzhou preferred to tap the manufacturing industry for job opportunities. Third, according to the division of labor, most employees living in QIIP were business elites who had acquired commodified high-quality services in Yuhang. Meanwhile, the workers could enjoy lower prices and living costs in Quzhou. Indeed, the Quzhou government led such a transition in the industrial structure. In 2019, the QIIP committee also withdrew most QIIP property rights, which further limited the power of the market-oriented body. The administrative intervention of the Quzhou government was shaped by intrapreneurialism, which identified a transformation of developmental goals within the government through vertical politics.
Discussion and conclusion
This study investigated the territorial expression of urban entrepreneurialism through cross-boundary development, wherein territorial rationality was reassembled through enclaving statecraft between cities. Given the nature of cooperation between the Zhejiang provincial government and both the Quzhou and Yuhang governments, territorial rationality was revealed in the stages of MSCIs formulation and QIIP establishment. The provincial government forged an institutional platform to regulate municipal statecraft and mediate the municipalities developed toward the suggested method of cooperation. However, a practical way to achieve regional cooperation emerged through collaborations between the Yuhang and Quzhou governments, including twin-city relations and land quota trading. The conventional literature on city diplomacy, intrapreneurialism, and state entrepreneurialism perceives entrepreneurial rationality as a relatively fixed ideology that is accomplished through cross-boundary statecraft. However, we argue that different ideologies have simultaneously existed between multiple governments, with the most influential being stepwise transition.
As a practical toolkit for facilitating the regional economy, the enclave presented “regional orchestrated” development, wherein the local government exercised powers of jurisdiction on behalf of the state (Harrison, 2008). In the QIIP case, a contentious function of division clarifies the difference between the provincial and central governments, such that the central government strategizes the integrity of the nation-state through policy interventions, while the provincial government prioritizes economic development with central supervision and strives to reverse a disadvantageous position by formulating a discursive local agenda. Enclaving statecraft gives coherence to discourses on provincial developmental aims through a practical pathway. In this sense, both a bottom-up approach from intercity negotiations and top-down promulgation were adopted rather than the “rescaling of state orchestrated” schemes (Wu, 2016). The municipal governments have taken advantage of policy sprawl (Miao and Phelps, 2022) to invoke cross-boundary construction, resulting in a win-win cooperation.
This study adds clarity to ongoing theoretical debates on urban entrepreneurialism in two ways. First, we found that the identities of polymorphous bureaucracies were exemplified by different entrepreneurial goals. In general, the state goal to protect arable ecological lands was achieved through policy implementation across multiple governments. Still, the provincial and municipal governments adopted statecraft to fulfill this goal within territorial rationality. Meanwhile, the central government formulated a state strategy to protect arable ecological lands, and distributed its aims to the provincial government. In turn, the provincial government mediated the integrated developmental willingness of the central government and local territorial rationality through an institutional platform, thus assisting municipalities in the exchange of surplus provincial resources through market-oriented approaches (e.g., the transfer of development rights in MSCIs). The municipalities gave rise to an enclaving toolkit, which offered a practical solution to meet the land quota requirement from the provincial and central governments while simultaneously elevating local prosperity. The provincial government forged an institutional platform in support of cross-boundary development, such that developmental strategies initiated by the central government can be mediated by the provincial government and actualized via the distribution of developmental goals to municipalities. Notably, the entrepreneurial ideology was configured by the high-level government in advance (in this case, the Zhejiang provincial government). The high-level government provided alternatives, although this approach was restricted and pointed toward a suggested route.
Second, activists in territorial statecraft were transitioned stepwise rather than driven by a fixed role in urban entrepreneurialism, such as city diplomacy or state entrepreneurialism. In the sectional development of QIIP, the Yuhang and Quzhou governments manifested certain features of city diplomacy while plotting the establishment of an enclave industrial park; likewise, in the operation of the QIIP committee, intrapreneurialism facilitated the promotion and branding of QIIP. These factors uncover the flexibility of entrepreneurial strategies, which varied at different development stages. The principle of territorial statecraft involved top-down politics throughout the process of cross-boundary development. Nevertheless, the provincial government did not intervene in grounded approaches adopted by municipalities. This suggests a hollowing-out of practical interventions by the provincial government, which merely serves as a regulatory institution in intercity cooperation. In other words, the provincial government is more focused on political regulation rather than state intervention. Under authoritarian bureaucracies, provincial governments set the disciplines of territorial statecraft to regulate municipal rationality in advance. Thus, the municipalities have reconfigured their territorial statecraft to pursue cross-boundary development.
In sum, this study investigated cross-boundary development and associated territorial statecraft among the provincial and municipal governments. Based on our findings, we argue that the ideology embedded in the governance of intercity cooperation was a stepwise transition rather than a fixed modality among the alternatives of city diplomacy, intrapreneurialism, and state entrepreneurialism. The transition of urban entrepreneurial ideologies signifies the way in which top-down initiatives have used territorial rationality as a modification technique amid China’s long-established planning centrality paradigm.
Footnotes
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The research reported in this article was funded by the Ministry of Education of China (Project No. 20JZD013), the National Natural Science Foundation of China (Project No. 42101187) and the Impact Postdoctoral Fellowship Scheme (Project No. 3133058).